Columbus, Ind.-based Cummins Inc. paid Chairman and CEO Theodore M. Solso $7.1 million last year, 24-percent less than his
total compensation in 2008. The rest of Solso’s management team also took substantial pay cuts in 2009, ranging from
17 percent to 52 percent.
Cummins filed its annual proxy statement Wednesday morning. It shows Solso, 63, earned $2.3 million less than in 2008. Solso has led Cummins since 2000. Last year the engine maker’s revenue slid from $14.3 billion to $10.8 billion, and its profit declined from $755 million to $428 million.
But in 2009, investors showed confidence in Cummins’ prospects. The company’s shares shot up 60 percent last year to $45.72. In 2010, they’ve increased another 36 percent, opening trading Wednesday morning at $62.32.
Solso’s pay included an annual salary of $1.1 million, performance-based bonuses worth $4.5 million and stock and options worth $1.3 million.
Pay for the other top executives:
—President and Chief Operating Officer N. Thomas Linebarger, 47, earned $2.3 million, down 23 percent.
—Vice President James D. Kelly, president of Cummins’ engine business, earned nearly $2 million, down 17 percent.
—Vice President Richard J. Freeland, president of Cummins’ components business, earned $1.6 million. His total compensation cannot be compared to last year’s pay, because it was not disclosed among the company’s top five executives in previous proxy statements.
—Vice President and Chief Financial Officer Pat J. Ward earned $898,767, down 52 percent.
IBJ uses the Associated Press formula to calculate executive pay. It gauges the value of compensation such as stock and options grants at the time they are awarded, not the time they are cashed in.
Cummins spent $1.2 million on combined board compensation for its nine independent directors last year, 12-percent less than the $1.4 million it spent in 2008.